Based on recent studies, a buyer with a cash offer is four times more likely to win a real estate bidding war compared to one with a financed offer. With several reliable cash home buyers Colorado springs now available to buy homes from people looking to sell their property quickly, the odds for people with financed offers are much lower.
Cash offered has become a growing trend in the real estate market for quite some time now. Going by the data from the National Association of Realtors, one-fourth of the total home sales in 2019 were through cash buying. This represents an increase of about 25%.
In case you are wondering why home sellers prefer these cash buyers compared to those with financed offers, well, the reason is not that far-fetched. For one, cash offers allow the deal to be closed more quicker. Closings on a financed home take 45-60 days or more to complete. This is because even pre-approved buyers have to get mortgage approval and go through underwriting before closing. For most home sellers, this period is already too long, especially if you consider how long the home has been on the market. However, with cash buyers, the seller has access to the cash almost instantly. Besides this, here are some other reasons.
No Mortgage Underwriting
Before agreeing to finance a home buyer, the lender will first verify that the buyer has the financial ability to make their monthly payments. The lender reviews the buyer’s credit, debts, and assets. Some lenders may also require additional information from buyers, such as tax returns and income documentation. After this, the lenders will also estimate property taxes, insurance, and HOA fees.
This entire process can take 30 to 60 days or longer, and there’s always the risk that the buyer’s financial standing can weaken during that time.
The underwriting process is one of the lengthiest parts of the mortgage process. It can take time to gather and review the information, and it can lead to denials if the buyers’ finances are not strong enough.
Homeowners who are looking to sell a home in a seller’s market often prefer to have their house sold without contingencies. This strategy is highly favorable to them as it absorbs them some risk.
As a buyer, if you make a non-contingency offer and unforeseen issues arise, you could lose your earnest money deposit or buy a house with undisclosed repairs you cannot afford. This is why sellers tend to prefer cash offers that do not include any contingencies.
Besides the benefit of a faster process, cash offers allow for a simpler closing. With a cash offer, the buyer is the one who arranges the title and sets up the escrow, and finds an agent who will help organize the whole thing and make sure the entire process is in order. This takes a lot of workload off the seller’s shoulders. Also, since no third party is involved, no external conditions will be introduced. This way, both the buyer and the seller are free to sign off on the deal without having to check in with anyone else.
One of the most notable reasons why sellers prefer cash offers over traditional real estate transactions is that a cash-only transaction is far less risky than one that includes financing.
When it comes to selling a home, until the buyers close the deal, the sales are fraught with uncertainty. And with financed offers, buyers are typically at the mercy of their lender. So even if the buyer is ready to buy, if the lender decides not to follow through, the entire sale will collapse.
All these risks are eliminated or reduced with cash home buyers.
In this day and age of tepid mortgage rates and record home prices, it’s no surprise that sellers are looking for a way to cut costs and make the most of their hard-earned money.
While a cash-only sale may not be for everyone, the benefits are worth the effort. To find out how you can sell your house for cash and move on to your next chapter, you can search for and contact a cash home buyer close to you. They can help you navigate the pitfalls of the traditional real estate sales cycle while giving you the tools to get your home sold fast. Selling your home to cash buyers is the least expensive, most stress-free way to turn your real estate dreams into reality.